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Most Rural Hospital Closures Happen in States That Haven’t Expanded Medicaid

We have previously discussed how Medicaid expansion (you know, the good practical plan that we Democrats support and Republicans oppose) is even better for rural hospitals than for urban hospitals. A new report from Protect Our Care and Rural Forward shows that failing to expand Medicaid appears to correspond with rural areas losing their hospitals:

Especially at risk because of Republicans’ health care sabotage agenda are rural hospitals, which rural communities often depend on for both primary and specialized health care services. Since 2010, 84 rural hospitals have closed. The vast majority, 90 percent, were in states that had refused to expand Medicaid at the time of the hospital’s closure. As of 2016, 673 rural hospitals were at risk of closing. Republicans’ continued attacks on Medicaid threaten the financial stability of these hospitals [Protect Our Care and Rural Forward, “A Tough Row to Hoe: How Republican Policies Are Leaving Rural Health Care in the Dust,” June 2018, p. 1].

Protect Our Care/Rural Forward, June 2018, p. 7. Data source: University of North Carolina Cecil G. Sheps Center for Health Services Research.
Protect Our Care/Rural Forward, June 2018, p. 7. Data source: University of North Carolina Cecil G. Sheps Center for Health Services Research.

The report further notes the great benefits that Medicaid and the Affordable Care Act (which we Democrats enacted and which Republicans are trying to take away) bring to rural America:

Following the implementation of the ACA, the uninsured rate in rural areas dropped from 17 percent in 2013 to 12 percent in 2015. The ACA has expanded access to health care to nearly 1.7 million rural Americans who have gained coverage through the Medicaid expansion, not only playing a central role in improving rural communities’ health, but also supporting these communities’ economic well-being. Medicaid covers nearly 24 percent of rural Americans, 45 percent of rural children, 15 percent of rural seniors, and pays for 51 percent of rural births. The uninsured rate in rural areas in states that expanded Medicaid has dropped by a median of 44 percent since expansion [POC/RF, June 2018, p. 1].

One of the local attacks on Medicaid, Governor Dennis Daugaard’s request for a federal waiver to pilot a Medicaid work requirement in Minnehaha and Pennington counties, is likely to push low-income workers off Medicaid without any affordable health insurance option:

…South Dakota, which limits coverage to parents with incomes below 50 percent of the poverty line, recently released a work requirement proposal for comment that some have argued addresses the catch-22.[18]  The state would provide parents whose incomes increase above Medicaid limits with premium assistance (i.e. subsidies to help them pay premiums for private coverage) for up to 12 months, following the 12 months of TMA.  But after 24 months, parents would still be on their own, with no assistance to pay for health insurance.

Furthermore, South Dakota’s premium assistance program would not provide enough help to allow low-income parents to actually afford coverage and care.  According to the state’s proposal, low-income working parents could use premium assistance, which would be set at the average per enrollee amount that the state spent on TMA in the prior year, to pay their premiums for employer coverage or for a qualified health plan in the individual insurance market.  As discussed above, however, few parents employed in low-wage jobs would likely have an offer of employer coverage; and in the individual market, South Dakota’s premium assistance program would only cover the cost of a “bronze” plan for most parents.[19]  Bronze plan deductibles average about $6,000, likely an insurmountable barrier for many people with incomes below the poverty line to afford care, and South Dakota would provide no assistance with cost sharing[20][Judith Solomon and Aviva Aron-Dine, “Non-Expansion States Can’t Fix ‘Catch-22’ in Their Proposals to Take Medicaid Coverage Away From Parents Not Meeting Work Requirements,” Center on Budget and Policy Priorities, 2018.06.11].

Republican resistance to Medicaid expansion and the Affordable Care Act are bad for rural America, including South Dakota. Those Democratic policies are good for what ails us.

7 Comments

  1. Spencer 2018-06-18 21:29

    Medicaid expansion, or the lack there of, had nothing to with that little red dot in South Dakota. The fate of that hospital was sealed before Obama was even elected. One wonders the same about many of the other closures in other states.

  2. jerry 2018-06-18 22:03

    This is exactly the direction that Billie Sutton/Michelle Lavallee need to drive forward on, Medicaid Expansion and how not having it keeps the state from having the means to care. NOem was instrumental, over her entire career in Washington, of voting against healthcare for South Dakota. Billie Sutton can not only hold her accountable, it is a winning road.

  3. Debbo 2018-06-18 23:24

    The casual cruelty of the GOP keeps growing. The refusal to expand Medicaid is just another example.

  4. Anne Beal 2018-06-19 01:33

    So here’s the thing: designated Critical Access Hospitals (less than 25 beds, more than 35 miles from any other hospital) qualify for per-cost reimbursement from Medicare, but not necessarily Medicaid. If elderly patients are moved from Medicare to Medicaid, and the state has not agreed to per-cost reimbursement for Medicaid, the hospital will have less revenue than before.
    More to the point, rural hospitals simply do not offer the services that larger hospitals do, and they have difficulty recruiting physicians, who don’t want to be the only doctor in town, on call 24/7.
    Rural hospitals are lucky if they can convert themselves to outpatient surgical centers, with emergency services geared toward preparing a patient for transport to a tertiary care center.

    Small towns are suffering from a lot more than hospital closures, they are also losing their Main Street businesses. Eventually the last grocery store closes, the school enrollment drops, and the town dies.
    Medicaid expansion doesn’t fix this.

  5. Cory Allen Heidelberger Post author | 2018-06-19 15:59

    Funny, Anne, that those disadvantages for rural hospitals, which are not unique to non-Medicaid expansion states, would not produce a more uniform map. Lack of Medicaid expansion shows a distinct correlation with where those disadvantages push rural hospitals out of business.

    Spencer, I have a statistical relationship consisting of many points of data. I can grant you your removal of one data point and still see a correlation on the map. I invite you to go through and similarly refute every point on the map.

  6. Debbo 2018-06-19 20:39

    Well Mike, red is succeeding. Life expectancy is lower in red states.

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